PLEASANTON, CA–A three-building, 191,009-square-foot, Class A office/R&D portfolio was acquired by Ridge Capital Investors LLC and Contrarian Capital Management LLC for $35.1 million. The properties, 5870 Stoneridge Dr., 4511 Willow Rd. and 5735 West Las Positas Blvd., are considered to be the top tier of the Tri-Valley R&D market, with high-quality recent construction, functional space, abundant parking, and access to nearby amenities and transportation.
The properties were acquired as REO from a CMBS trust with CW Capital acting as special servicer. CW Capital took control in 2011 after the buildings and the market had suffered from high levels of vacancy during the most recent downturn. Currently, the three buildings are 80% leased.
Trevor Wilson, managing director, Ridge Capital Investors LLC, tells GlobeSt.com:
"This acquisition represents an opportunity for us to invest in high quality, Class A real estate in one of the most well-known, master-planned office parks in the Bay Area. The Tri-Valley markets are experiencing healthy leasing momentum and the portfolio should directly benefit from this trend."
Ridge and partners are planning to rebrand the portfolio and to execute a repositioning plan that includes major interior upgrades, new signage, landscaping, painting and parking lot upgrades. The new branding, along with market-ready renovation of the vacant space, will bring the portfolio to a Class A tech/creative quality that is rare, yet highly sought-after in this market. The overall business plan is to invest capital strategically to bring the portfolio to a level of finish and appeal that is frequently found in Silicon Valley. The property will be leased and marketed by Jeff Birnbaum and Andrew Schmitt of CBRE.
The portfolio is located within the 10 million-square-foot Hacienda Business Park, located at the Dublin/Pleasanton BART station. The park houses more than 650 companies and employs approximately 18,000 people. It has averaged 91% occupancy from 2008 to 2014 and consistently outperforms its submarket. R&D properties within the market have fared even better as the market has improved, with vacancy less than 7% for the first quarter of 2015, representing a significant drop from 12% peak in the early stages of this cycle. Recent leasing activity has produced increasing rates of absorption and suggests that this trend is likely to continue.
Ridge Capital Investors is a real estate investment and operating firm located in San Francisco that invests in similar commercial and multifamily properties throughout the region. Founded by Wilson and principals, Brian Printz, Thomas Daniel and David Karol, the company focuses on opportunities where it can create significant value by capitalizing on the team's collective 20 years of experience. The Ridge team has logged more than $3 billion of real estate investment and development transactions.
Contrarian Capital, a distressed investing specialist, was established in 1995 by Jon Bauer, Janice Stanton and Gil Tenzer. The firm manages approximately $4 billion in assets.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
